Appeals Court Grapples With Florida Foreclosure Battle

ATLANTA (CN) – The 11th Circuit showed impatience Tuesday for both Wells Fargo and the homeowners suing the bank over an unsuccessful foreclosure action that they say caused them emotional distress.

Lois Ranger and George Gordon brought the complaint in question in October 2015 after receiving a $104,999 demand that month from Wells Fargo regarding the loan attached to their property in Miramar, Florida.

But just six months earlier, Ranger and Gordon had prevailed against a foreclosure action brought against them by the lender itself, HSBC Bank.

Though Ranger and Gordon had been making payments on the loan while the foreclosure action was pending, Wells Fargo, as loan servicer, was placing those funds in a suspense account and not crediting them to the account as payments.

Ranger and Gordon accused Wells Fargo of violating the Real Estate Settlement Procedures Act, as well as negligence and conversion, but a federal judge found that they could not plead any recoverable damages and dismissed the suit.

Representing the bank, Greenberg Traurig attorney Kimberly Mello urged the 11th Circuit on Wednesday to affirm dismissal.

She said that the homeowners sent Wells Fargo a notice of error and then filed their lawsuit prematurely, but U.S. Circuit Judge Robin Rosenbaum inquired how Wells Fargo arrived at the figure it sought to collect in October 2015.

“What did that $104,000 cover?” Rosenbaum asked.

“I don’t know,” Mello replied.

“But that’s precisely the question being asked,” Rosenbaum responded.

U.S. Circuit Judge Gerald Tjoflat meanwhile questioned the lawyer for Ranger and Gordon about the same thing.

“You sent a letter asking for explanation of the $104,000 notice,” Tjoflat said. “You can ask for the documents. But instead, you filed a lawsuit.”

Tjoflat also harangued the attorney about problems with the complaint.

“There are conclusory allegations all over the complaint,” Tjoflat said.

“Your complaint is full of broad conclusions which no one could possibly respond to,” the judge added.

Jeffrey Golant, the attorney based in Coral Springs, Fla., argued that the lower court should then have dismissed their case with leave to amend.

Earlier in the hearing, U.S. Circuit Judge Robin Rosenbaum asked Golant whether his clients made mortgage payments after the foreclosure action was dismissed in April.

“No, they did not because they didn’t know who to make the payments to and how for how much,” Golant responded.

Golant argued that, once the case was dismissed, it’s his clients’ position that they shouldn’t have had to pay any interest, adjustments or penalties.

“We filed a notice of error wanting an adjustment to the account that Wells Fargo had been erroneously pursuing,” the attorney argued.

Discussing the case over the phone prior to the hearing, Golant said his clients were immediately skeptical of Wells Fargo’s demand.

“The letter says we owe that payment, but we don’t think that’s true,” Golant said.

“They were making their payments,” he added. “This has been going on for years. … Wells Fargo wasn’t keeping track of their payments and filed their foreclosure lawsuit against them.”

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